July 16, 2020
Have you seen the video where a dragon is flying and roaring over a football stadium before the game, and the entire crowd was awestruck? That was an Augmented Reality (AR) Live Streaming done by a South Korean telecom player to promote its 5G capabilities. The question is: what else can we expect from the AR and Virtual Reality (VR) around us and in the future? Some creative brains would say that this technology can be used in faking an alien invasion, but we are not going that far here. We will focus on opportunities and the evidence of AR/VR use in the financial services industry.
Overhyped by some and hugely undermined by others, not many emerging technologies have generated buzz like virtual and augmented reality. For the benefit of a wider audience, let’s start with the basics about AR and VR and then move on to some real-world applications in the financial services universe.
Virtual Reality (VR) is a broad term for an immersive multi-sensory computer-generated experience that allows users to interact with a simulated environment. This state-of-the-art experience allows users to sense and perceive ‘realities’ around them when they put on a VR headset, typically a head-mounted display. This alteration allows them to believe their existence in a virtual world. VR applications range from real estate for property viewing, virtual gaming, or medical space where surgeons can plan treatment.
Augmented Reality (AR) is the technology that assembles and overlays a digital perception over the actual world. AR provides a fully immersive and dynamic virtual journey that enhances the real world with images, text, and other information via a host of capable devices like smartphones, smart displays, glasses, smart lenses, and tablets. In recent times, the most well-known application of AR was with the popular Pokémon GO franchise, which gained breakout consumer success. Though still in its nascent stage, augmented reality has been adopted by innovators and businesses worldwide that are not confined to entertainment. For example, Swedish furniture retailer IKEA created an AR app to help create a dazzling and immersive experience for shoppers to visualize how certain products would look and fit in their homes before deciding to purchase.
The emergence of business applications of AR and VR has been accepted by many industries like marketing, healthcare, real estate, hospitality, travel, and financial services to improve business propositions. A report by global investment bank Goldman Sachs estimated augmented and virtual reality to become an 80-billion-dollar market by 2025. The key use cases that financial institutions are experimenting with focus on the increased value propositions that can be derived by making the experience more personalized and accessible core banking systems (CBS). The use cases vary from basic apps that use location services that help to deliver updates about the nearest ATM and bank branches to dynamic 3D solutions promoting investment advice and banking solutions.
AR caught wider attention during the Pokémon Go craze as 1 in 10 Americans were hooked to the virtual world mapping gaming application, which serves as a testament to the scope for applying such technology into other functions of daily life as banking and payments. It is safe to say we are still at the tip of the iceberg in terms of widespread use of AR/VR around us, with the basic drivers including camera, GPS, and internet already in all our pockets. An AR/VR can transform basic banking and financial data into a staggering, visual experience that can bring a personalized, face-to-face experience into a customer’s home. AR/VR is typically changing the way financial institutions show empathy by making the experience more personal. For instance, Fidelity Investments introduced a VR agent named ‘Cora’ that can interact with the user by recommending stocks, pulling up financial charts, and assessing how a company performs for it to fit into the investors’ portfolio. A client has the option to ask Cora questions in a VR chat room.
Virtual Trading: With advanced AR or Mixed Reality (MR)-backed stock trading and investing has enabled participants to track and visualize financial markets with greater depth. A tremendous shift from flat images and charts to holographic visualization, 3D figures, and intuitive heatmaps have shown a revolution in terms of market data analysis. This technology has also evolved the use case of the term “workplace anytime-anywhere,” with users enabled to work on laptops and mobiles as well as switch to virtual rooms to seek advice from virtual agents. Colleagues and partners can collaborate to work on projects and strengthen decision making by jointly analyzing financial data.
For instance, TD Ameritrade uses an immersive virtual reality experience for users, which starts at a ‘street view’ to educate about the working in the stock exchange, and then shows a ‘helicopter view’ of live markets using holography and 3D charts offering real-time guidance for investing and exchange.
Swiss online bank Swissquote developed a virtual reality (VR) application that uses a VR helmet to create a 360° trading wall for users to monitor markets and make trades with a glance.
Virtual Retail Banking: As the shift towards digitized ecosystem is happening at an incremental pace, the idea of virtual retail banking is already in the rollout. Through the use of chatbots and virtual assistants, the experience of banking is becoming more personalized and immersive to enhance the customer experience (CX). Providing a face-to-face interaction from any time anywhere is a key-value addition that many banks are chasing with augmented reality (AR), facilitating better interaction and trust in the advice.
Enhanced Security: With an exponential rise in the use of data security management systems, many institutions are looking at tech-driven options to boost core systems. With biometrics as a part of the augmented reality framework, financial services propose more secure and sustainable protection against data breach and identity theft. With the advent of behavioral biometrics, iris detection, facial gestures, and voice recognition are being integrated with AR along with the existing framework of fingerprint scanners to build secure options. In 2018, Axis Bank became the first Indian bank to adopt AR coupled with Iris Scan for Aadhaar-based authentication for micro-ATM apps. Real-time detection of nearest branches and ATMs was also made feasible using the ‘AR view’ in-built feature.
Enterprise Training and Education: According to a report by Tractica, the enterprise Virtual reality market could be valued at more than $12.6 billion by 2025. Apart from industries like aviation, construction, and healthcare, the banking and financial service industry is also finding its roots in virtual training to build on value additions and services. On-job training is seen as both an implementable and well as a cost-efficient way of upgrading services. The financial education of clients is also seen as a great way to build on the prospective client and expand network branches.
For instance, Desjardins Bank’s integrated augmented reality platform delivers applicable and integrated retirement planning and investment advice to customers. The ‘Your Way Desjardins’ AR application is fueled by an assistant named ‘Penny’ to help educate and recommend saving plans to customers in a personalized manner considering the stage of life they are in, and the risk capacity they have. Penny uses interactive videos and storytelling to guide clients through the process.
Data Visualization: The financial services space generates huge amounts of data on a day-to-day basis. Data management helps advisors, investors, and traders to get a simplified visual breakdown of heaps of data to make informed decisions about financial management, and AR/VR has made it more accessible than ever before. Fidelity Labs created Oculus Rift using the technology to create an immersive 3D environment to analyze data accurately and assess returns on stock portfolios. Using tech, they created a virtual world of ‘Stock City’ where markets can be turned into 3D reality for insights and data immersion.
Visa launched an AR app at the Mobile World Congress in 2018 that overlays a food outlet heatmap over your surroundings allowing users to integrate with the apps to point to specific parts and order food. Once the order is placed using a restaurant service, users can instantly go on and pay using Visa. This immersive payment system allows for a personalized experience and enhanced real-time interaction with outlets. Similarly, MasterCard teamed up with Swarovski to launch a VR shopping app allowing dynamic purchasing mechanisms for Swarovski’s home décor range. Users could complete transactions using Masterpass, Mastercard’s digitized service for payment processing.
Payments processor Payscout released a VR app that enables users to make payments for physical products in virtual reality via the Google Cardboard viewfinder. Payscout VR Commerce integrates with Visa Checkout (VCO), allowing users to register payment credentials within the digital wallet.
The insurance ecosystem, which lags across the value chain, is looking for innovative engagement with young customers to enhance customer experience and create an emotional connection with the brand. In the long term, this can help drive cost optimization, reduce wait time, explain complex ideas using visual aids, and more.
PNB MetLife offers a virtual reality customer service platform called ‘conVRse,’ built in collaboration with MetLife’s innovation center ‘LumenLab’ in Singapore and PNB MetLife in India. By using VR headsets such as Google Cardboard or Samsung GearVR, customers find themselves in a 3D simulated virtual room, face-to-face with PNB MetLife’s insurance expert “Khushi.” Khushi is a virtual avatar with a human voice, powered by one of the many live PNB MetLife insurance experts. The platform displays policy-related information and uniquely engages the customers through visual assist elements like animations.
A rule of thumb states that home buyers generally decide whether they want to purchase a property within a couple of minutes of visiting the estate. With the motive of simplifying the process of finding new homes in Australia, the Commonwealth Bank launched the ‘CommBank Property App’ allowing users to scan a property near them by virtual visits in real time and to gain access to all information including suburb profiles, median pricing, growth trends thus providing an immersive platform for users to make informed decisions on location in accordance to their lifestyle. Exploring the property using the AR application without physically being present allows for saving time and lengthy processes of taking appointments with property guides and advisors. The Commonwealth Bank has also integrated loan repayment schemes based on the consumer’s financial health to provide personalized insights while mapping the complete home buying journey for a client.
Together with Mimesys and HTC Vive, BNP Paribas Real Estate offers an innovative experience with an augmented reality remote property viewing solution. This ‘holoportation technology’ enables a London buyer or investor to view a property located in Hong Kong or anywhere in the world. Equipped with an HTC Vive headset, a buyer/investor can instantly attend a venue, talk to his agent—in the form of a hologram—and potentially handle mock-ups to alter his project.
As we know, the true potential of new technology is realized when the dissemination is not limited to only a few deep-pocket organizations. The SaaS model helps in such situations by democratizing the access and increasing the affordability of the new software solutions. The true potential of VR adoption can be realized by creating an ecosystem of ‘VRaaS’ or ‘VR SaaS’ solution providers.
There is no denying that the augmented and virtual reality tech revolution in the financial space has great mileage. Banks and financial institutions have successfully utilized this tech for core solutions and purposes like data analysis, data visualization, accessibility of complex data, and ease of business practices such as virtual team meetings. However, the list is only set to expand multifold as the difference between value creation by organizations who use tech and those who don’t is increasing on a massive scale. Millennials, the generation expected to drive business patterns with the implementation of technology, will play a key role in the adaptation of such tech and drive decisions for tech-driven inclusion of solutions for traditional players like banks and other innovators.